rental housing industry

Does the rental industry have an image issue?

New survey sheds light on public’s ambivalent attitude toward Ontario’s apartment sector
Thursday, April 21, 2016
by Erin Ruddy

Renting is a hot topic in Ontario today where approximately 30 per cent of households live in apartments. Gentrification, affordability and the downward trending vacancy rate are among the many sub-themes guaranteed to spark lively debates about the current state of the rental housing industry.

To dig a little deeper into what exactly that state is and how Ontarians really feel about it, the Federation of Rental Housing Providers of Ontario conducted a public opinion poll in combination with the latest data and census results. While it’s no surprise the survey turned up a whole lot of confusion about legislation and government policies, one thing that came through loud and clear was the lack of confidence people have in rental housing’s ability to meet their needs, both now and into the future.

“I believe the lack of confidence comes from a concern over what is contributing to the high cost of all housing—including rental housing—and the lack of a realistic plan on how to extend appropriate help to families who need assistance in making ends meet,” said Scott Andison, President and CEO at FRPO. “I do not believe the research results reflect a concern with rental housing providers, but rather a well-deserved concern about the public policy environment that controls how rental housing is built and delivered.”

In a presentation at the Toronto Convention Centre this April, Andison outlined the Government of Ontario’s numerous interventions introduced to boost housing affordability and availability. “Direct investment has been made in hundreds of thousands of social housing units,” he said. “Income supplements, rent controls, and progressive municipal authority affecting local development have been applied.”

On the flipside, Andison noted the $7.4 billion in capital expenditures Ontario’s private rental housing industry invests annually in Ontario ($4.6 billion in new construction, $2.8 billion in renovation & repair)—pointing out that this sum is greater than what the Ontario Government invests in GO Transit and provincial highways combined. He said it also contributes more to the economy than the wireless telecom industry and almost three times as much as the defence and security industry.

Yet the public’s perception of the rental housing sector remains ambivalent. The survey, which was conducted between December 3, 2015 and January 9, 2016, interviewed both home owners and renters for a total sample size of 600 individuals. Of those, nearly half said they are not confident that the rental housing sector is meeting their needs.

“Affordability is seen as the biggest issue followed by availability of standard and low-income housing,” Andison explained. “Beyond that, less reported concerns included resolving issues between housing providers and tenants, government regulations and rising energy costs.”

So, are apartments becoming too unaffordable for the majority of Ontarians? Interestingly, nearly 70 per cent of renters who responded to the survey said they were satisfied with both the price and quality of their own accommodations. “Convenience/location” was cited as the main reason for being satisfied (29 per cent) followed by “affordability” (14 per cent) and “quality” (13 per cent).

Another interesting finding was that, while 61 per cent said they support rent control for privately-owned rentals in Ontario, the same group was divided about whether or not rent control had made any impact in the long run.

“What this research revealed was that, beyond the general ‘who-does-what’ confusion, there are several public policy factors affecting the cost of rental housing that are not widely known,” said Andison. “For example, on average apartments are taxed by municipalities at twice the rate of houses and condos; municipal fees and charges add an additional 6-10 per cent to the monthly rental costs.”

Andison explained that while he believes the industry and government are aligned in their desire to do everything possible to make housing more affordable and more available, the Ontario government continues to ignore the evidence that shows that policies mandating some tenants to subsidize the rents of other tenants in the same building simply causes all rents to go up, and fewer new units to be built. This, in turn, causes rental housing to become more expensive for even more families.

“I believe we’re seeing a general concern regarding housing based on the current policies of the provincial and municipal governments,” he said. “That is why FRPO supports portable housing benefits—government providing an income top-up to those low-income families who qualify so that they can access rental housing when and where they need it.”

Getting the bad rap

Current and future government policies aside, as a landlord on the frontlines of the rental field every day, Chris Seepe knows all-too well about the struggles and strife, the legal disputes—and yes, even the bad reputation he and his colleagues are saddled with.

“I think there is a minority of tenants out there with a great sense of entitlement,” Seepe said, pointing out that of his 43 tenants in Ontario, two of them occupy about 80 per cent of his time. “Do we as landlords get a bad rap? Unequivocally yes. That’s because there are the few among us, the ‘slum lords’ as they’ve been called, who really lower the bar and create that negative reputation. But the same applies to tenants. That entitled minority causes problems for everyone.”

Though Seepe was not surprised by what the survey drummed up, about the ambivalent attitude and flagging confidence the public feels towards his industry, he did have the following words of warning to share with his peers: “If I have any advice to offer other landlords, it is to document everything – qualify, qualify, qualify,” he said. “Even though you own the building and the units, while the keys are in your tenants’ hands, they have all the power.”

Key facts and findings from FRPO’s rental housing industry survey:

  • 61 per cent support rent control for privately-owned rentals in Ontario
  • 26 per cent think private sector rental housing providers have built fewer rental units due to rent controls
  • A strong majority say government is doing too little to help low-income families and seniors
  • Satisfied renters cite ‘convenience’ and ‘affordability’ as main reason for being satisfied with their rental accommodation
  • Ontarians are divided on whether or not owning a home is more affordable than renting

 Erin Ruddy is the editor of Canadian Apartment Magazine

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